Nifty 50 Index forecast: Here’s why India’s blue-chip stocks are soaring

The Nifty 50 Index rose by over 3% on Tuesday as investors cheered the potential deal between the United States and India. It also rose as hopes of a deal between the US and Iran continued and as traders waited for the upcoming earnings of some of the biggest Indian companies. 

The blue-chip Nifty 50 Index has risen by 15% from its lowest level in April last year, underperforming top global indices like the TSX Composite, Nasdaq 100, and the S&P 500. 

Similarly, the Indian rupee rebounded, with the USD/INR has crashed from a high of 92.15 on January 28 to the current 90.34, its lowest level since January 21st.

US cuts Indian tariffs 

The Nifty 50 Index rebounded after Donald Trump announced that the US would cut tariffs to 18% from the last 25% after India agreed to stop buying Russian oil.

Trump noted that India would reduce tariffs and non-tariff barriers and then purchase US goods worth over $500 billion across sectors like energy, agriculture, and coal.

Analysts believe that the reduced tariff will help to boost the Indian economy by at least 0.2% this year, moving closer to 7%. That’s because the United States is one of the biggest markets for Indian goods. In a statement, a top analyst said: 

“Many in India would prefer to remain strategically unaligned, but if this rapprochement proves durable, India would likely gravitate back into the US bloc.”

Top Indian earnings ahead 

The Nifty 50 Index rally coincided with the broader rebound of the global stock market. Data shows that US equities continued rising on Monday.

The Dow Jones Index jumped by over 400 points, while the S&P 500 and the Nasdaq 100 indices rose by over 40 basis points.

Other global benchmarks like Canada’s TSX Composite, FTSE 100 and the German DAX also rebounded as the United States and Iranian negotiators started talking. The two sides are being facilitated by countries like Turkey and Qatar.

These talks explain why crude oil prices crashed, with Brent and the West Texas Intermediate falling to $66 and $62, respectively. 

Looking ahead, the next key catalysts for the Nifty 50 Index will be the upcoming earnings by some of the biggest constituent firms. Adani Ports, Adani Enterprises, and Bajaj Finance will publish their results on Tuesday.

Adani Enterprise stock jumped by 10%, while Bajaj Finance, Adani Ports, Jio Financial, and Eternal rose by over 5%. Other top gainers were companies like Shriram, Dr. Reddy’s, and Bajaj Finserv.

Similarly, Bajaj Finserv will release its earnings on Wednesday. Other companies like Bharti Airtel, Indian Oil, Tata Motors, Hero Motors. State Bank of India (SBI) will release its financial results on Saturday.

Most Indian companies like Larsen & Toubro, Maruti Suzuki, and NTPC released strong financial results last week.

Nifty 50 Index technical analysis 

Nifty 50 Index chart | Source: TradingView

The daily timeframe chart shows that the Nifty 50 Index pulled back to a low of 24,550 INR on Monday and then rebounded to a high of 26,310 INR. 

The index has formed an up-gap and 50-day and 100-day Exponential Moving Averages (EMA). It has risen above the Supertrend indicator.

Therefore, the most likely scenario is where the index continues rising as bulls target the next key resistance level at 26,000 INR. A drop below the key support level at 25,000 will invalidate the bullish outlook.

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